Repay Holdings Corp Q3 FY2022 Earnings Call

Welcome to today's earnings conference call being hosted by Repay. With us today are John Morris, Co-Founder and Chief Executive Officer; and Tim Murphy, Chief Financial Officer. During this call, we will be making forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking statements are subject to risks and uncertainties, including those set forth in the SEC filings related to today's results, as well as in our most recent Form 10-K filed with the SEC. Actual results may differ materially from any forward-looking statements that we make today. Forward-looking statements speak only as of today, and we do not assume any obligation or intend to update them, except as required by law. In an effort to provide additional information to investors, today's discussion will also include references to certain non-GAAP financial measures. Reconciliations and other explanations of those non-GAAP financial measures can be found in today's press release and in earnings supplement, each of which are available on the company's IR site. I would now like to turn the call over to Mr. Morris. Please go ahead, sir. You may begin your presentation at this time.

Thank you, operator, and good afternoon, everyone. As you can see from our results, we delivered strong performance in the third quarter across all our key metrics. This demonstrates the resilience of our diversified business model. We saw card payment volume growth of 15%, revenue growth of 17% and gross profit growth of 20%. Organic gross profit growth in the quarter was 15%. While much of the organic growth contribution was from our B2B business this quarter, we are excited about opportunities in both our B2B and consumer payment verticals. As a reminder, consumer represents approximately 70% of our total business. B2B is approximately 20%, and the remainder is primarily RCS. Consumer and B2B together represent over $5 trillion of annual payment volume, of which we currently process less than 1% on card, which provides support for our tremendous long-term growth opportunities. Both verticals have specific transaction processing needs and have lagged behind other industry verticals in moving to digital payments. This leads to lower penetration rates for electronic payments, specifically, card payments and a general lack of competition, which provides us with the opportunity to embed our payment technology directly into the client and to the client software platform, thereby increasing stickiness and expanding margins. We believe that our vast distribution network of 236 ISV partners and deep presence in these vertical end markets creates durable growth, strong economics and significant defensibility. Within these ISV relationships, we have launched our integrated partners program to add product features and functionalities through the existing integrations in order to further penetrate these relationships. This represents a significant growth driver for 2023 and beyond. I'll start with a view of our B2B payments business during the quarter. As you all are aware, B2B payments have traditionally been made by check or ACH, including AP and AR. So there is a very large and under-penetrated market to attack in this vertical. We often get asked, what is your competitive advantage versus other B2B players? There are many players focused in the B2B market, which is mostly driven by the massive opportunity. First, I would highlight our complete offering, which includes our TotalPay solution where we can execute supplier payments on behalf of our clients via all payment methods including check, ACH, enhanced ACH and virtual cards; AP automation, where we allow our clients to outsource their entire AP function, including our proprietary approach to supplier enablement; and lastly, merchant acquiring, where we allow our clients to accept electronic payments from other businesses in a highly integrated manner for their ERP accounting solutions such as Sage or Acumatica. Please recall that we believe we are one of the only B2B payment providers to offer 2-sided integrations via Sage and Acumatica, which allows for both AR and AP payment automation and execution directly within the ERP environment. Second, I would highlight our vertical expertise. In AR, our largest areas of focus, including manufacturing, wholesale and distribution. In AP, our largest areas of focus include auto dealers, health care, hospitals, media, hospitality, property management, field services and government. In addition, we are primarily focused on medium to enterprise-size customers, which tend to be more resilient in any market condition versus SMBs. Third, I would highlight our go-to-market strategy and supplier network. As of the end of September, we had 85 B2B integrations and have expanded with many providers such as Sage, which we announced during the quarter. We have also a dedicated in-house sales team working to sell our solutions. As of the end of September, our supplier network has grown to 147,000 vendors, a 40% increase year-over-year. Having a large supplier network is especially important when we talk to new customers and sub-verticals. Having that supplier network that we can already address with them is very helpful. Additionally, in terms of our talent, we have a great B2B team today, but we will continue to build out the sales and partnership functions. We plan to make key focused investments specifically on the AP side due to the massive TAM and low penetration of electronic payments. Turning now to a few Q3 updates within our B2B vertical. As mentioned on our Q2 call, we expected the political media volume to ramp into the second half. Thus far, political ad spend is generally in line with what we expected. As for recent wins, we announced an AR agreement with Jones Healthcare Group, a market leader in advanced packaging and medication dispensing solutions. We were able to create a one-stop shop payment ecosystem, enabling Jones' pharmacy customers to self-service and pay invoices online. We also recently announced an exclusive referral partnership with SpendMend, a leading provider of solutions to optimize the cost cycle for the health care industry. Repay will be the exclusive accounts payable solutions for SpendMend's clients across the health care sector. On the consumer payments side of our business, we saw strength across our various sub-verticals. As a reminder, the TAM for just this part of our business is approximately $2 trillion of annual payment volume, and credit cards are not typically accepted for loan repayments, which has resulted in an overall low card penetration. Our debit card acceptance offering provides many benefits to the lender, including: accelerated payment cycle, which is the ability to lend more and faster through card processing; 24/7 payment acceptance through always open omnichannel offering; omnichannel payment methods, web, mobile, IVR and text; fewer ancillary charges, such as NSF or borrowers through automatic recurring online debit card payments; direct software integrations to embed payments into loan dealer and other workflow management systems, which reduces operational complexity for our clients. As of September 30, we had approximately 150 ISV relationships for just the consumer payment side of our business. Also, our solutions offer improved regulatory compliance through fewer ACH returns. Our Instant Funding product, which we process through Visa Direct and MasterCard Send continues to show strength. In the third quarter, volume was approximately 50% ahead of our Q3 2021. We believe this is another way to influence our more digital card-based repayment transactions as the repayment method on file is a debit card. Recall that we are a payments leader in the personal loans, auto loans, credit unions, mortgage servicing payment verticals. We now have approximately 5,500 clients across these end markets, including close to 230 credit unions. In these markets, lenders are looking for ways to engage with the borrower. They do this by the deployment of our omnichannel payment solutions, which are fully embedded into the lenders' financial software. In fact, we recently extended our existing relationship with Fairstone Bank, one of Canada's largest lenders. This new agreement is big, will focus on supporting various forms of lending through Buy Now Pay Later and embedded financing solutions and further expands the Repay services offered within the Canadian lending market. Regarding the macro conditions in the personal loans vertical, many of the same trends exist that we discussed previously, including continued strong demand for credit. For the auto lending vertical, we believe our offering is more important now than ever before as lenders look to make auto loan collections as easy as possible for their customers. We also continue to be encouraged by our efforts in the mortgage servicing sector. Mortgage servicers are looking for more flexible and convenient ways to pay, but they still have to follow strict processing and notification and servicing requirements. Our payment platform makes it easy to keep borrowers happy and servicers in compliance. In every area of business, we are focused on finding the right talent in place to further accelerate penetration, and we found that in our recent hire for mortgage vertical, Erik Skinner. Erik joins us from Black Knight, where he was responsible for MSP and back-office customer experience modernization. He has vast experience working in the mortgage servicing industries throughout different times in the market and brings a unique product perspective to Repay. Mortgage has become one of our fastest-growing areas within Repay, growing north of 30% in Q3 '22 versus the same period last year. Please recall, we are less sensitive to the macro in mortgage since most of our growth is derived from existing clients. We're also now actively selling our AP solutions into clients across the consumer verticals, such as lenders and health care providers. We had experienced some recent wins. Lastly, on the consumer side, we expect to see a pickup in our accounts receivable management or ARM and revenue cycle management businesses as consumers take on more financial obligations, such as credit card balances, medical bills and cell phone bills. According to the Federal Reserve Bank of New York, credit card balances in Q2 saw their largest year-over-year percentage increase in more than 20 years. Placements will be picking up here in the short term, and based on the challenges with inflation, consumers are going to have to select payment plans as a way to pay off these outstanding past due financial obligations, which benefits Repay as we gain volume from the consumer making more payments. Repay Clearing & Settlement or RCS, continues to perform nicely with significant pipeline for future growth. We continue to win business from the larger, incumbent acquirers and truly believe that our more modern acquiring platform will allow us to keep taking share in future periods. Before I turn the call over to Tim, I wanted to provide a few thoughts about next year and beyond. As I hope you take away from my comments, we continue to be energized by our unique offering, technology platform and our exceptional team. In addition, we remain very encouraged by the secular tailwinds in our business, including the ongoing trends away from cash and check towards digital payments. We are laser-focused on growing organically with growth from both existing customers and new customers of all sizes. Our specialization in key verticals will continue to aid our growth for years to come. Our sales teams have deep experience in these verticals and a strong understanding of client needs. We have hundreds of ISV relationships to expand our reach and provide an ease of implementation, aided by our superior software and payment solutions that are specifically designed with these verticals and clients in mind. While we are targeting investments in these high conviction growth areas to seize more market share, we have always and will continue to remain focused on sustainable, durable growth with strong unit economics. One of our main priorities is to have the right cost structure in place so that we can support growth while maintaining healthy margins. Now for 2023 specifically. Sitting here today, we continue to feel confident in solid organic growth, even in an economic downturn for the following reasons. Number one, our core consumer payments business, particularly the lending verticals are resilient, should grow even during a downturn. As a reminder, consumer also includes our ARM business, which is expected to see a pickup as consumers experience positive financial obligations such as credit card balances, medical bills and cell phone bills. Number two, Payix will be included in the consumer payments organic growth beginning in Q1 of next year. And its growth rate is expected to be well above the overall corporate average. Number three, we have a strong sales pipeline in consumer and B2B payments as a result of our increased investments in go-to-market and product innovation. This has driven many new wins in 2022, which should be fully rolled out in 2023. Number four, as I mentioned previously, our B2B services are focused on medium to enterprise businesses. We believe that that customer base will be resilient in any environment. This is a much faster growing part of our business, which we expect to have solid growth next year despite having the media volume impact of 2022. Finally, while we continue to be open to M&A, our capital allocation priorities are currently focused on creating value for our shareholders by investing in initiatives that support our growth strategies as well as buying back shares. We believe our current valuation of our shares does not align with the value of our company. The program we have in place is a responsible way to deploy capital consistent with our disciplined approach. With that, I'll now turn the call over to Tim to review our third quarter results in more detail.

Thank you, John. Now let's move on to our Q3 financial results before a review of financial guidance for 2022. As John mentioned, in the third quarter, Repay delivered solid results across all of our key metrics. Card payment volume was $6.4 billion, an increase of 15% over the prior year third quarter. Revenue was $71.6 million, an increase of 17% over the prior year third quarter. This represents a take rate of approximately 112 basis points. Payix contributed approximately $3.1 million of incremental revenue during the quarter. Moving on to expenses. Cost of services were $16.6 million compared to $15.3 million in the third quarter of 2021. Incremental cost of services from Payix were $0.9 million for Q3. Gross profit was $54.9 million, an increase of 20% over the prior year third quarter. As John mentioned, on an organic basis, we saw gross profit growth of 15% compared to the third quarter of 2021. SG&A was $36 million compared to $33.7 million in the third quarter of 2021. Third quarter adjusted net income was $22.8 million or $0.24 per share. Lastly, third quarter adjusted EBITDA was $31.7 million, an increase of 30% over the prior year third quarter. Third quarter adjusted EBITDA as a percentage of revenue was 44%. We are continuing to prudently manage hiring and other non-personnel expenses due to the current macro environment. Combined pro forma net leverage is approximately 3.4x, down slightly from 3.5x at the end of Q2. We continue to expect this to be closer to 3x by the end of 2022. As a reminder, of the $460 million of total gross debt, $440 million of this is convertible with a 0% coupon and 40% conversion premium. This convertible debt does not mature until February 2026. As of September 30, we had approximately $64 million of cash on the balance sheet and access to $165 million of undrawn revolver capacity for a total liquidity amount of $229 million. We feel very good about our balance sheet heading into a potential downturn. As of September 30, we had approximately 100 million shares outstanding on a fully diluted basis. Moving on to our thoughts for the remainder of the year. Based on the results from the first 9 months of the year as well as current trends, we're reiterating our guidance for 2022, which includes volume to be between $25 billion and $26.3 billion, revenue to be between $268 million and $286 million, gross profit to be between $204 million and $216 million and adjusted EBITDA to between $118 million and $126 million. In terms of cost management, as we have done in the past, we continue to work with our vendors to find opportunities to reduce processing costs as we add volume. In the event of an economic downturn, we will remain nimble, with the ability to further pull back on hiring and reduce other operating expenses such as travel. We feel very good about our third quarter results. This sets us up well for strong performance throughout the remainder of 2022 and into 2023 with the expectation for continued growth in any macro scenario.

Our first question comes from Andrew Schmidt with Citi.

It’s great to see the consistency here; this has been a strong quarter. Let me share some thoughts on 2023. I know both of you mentioned growth in various economic scenarios. Last quarter, we anticipated a mid-teens growth rate for this year. However, the economic landscape has shifted somewhat. Could you provide a framework or some guidelines on what growth might look like under different economic conditions for 2023? Any insights on this would be appreciated.

Yes. Thanks, Andrew. I mean I think based on what we know today, we still feel good about growth next year for all the reasons that John laid out in his remarks. And there's a lot of specific call-outs there that support growth, really, in any macro scenario. And we're currently seeing what could be considered a mild recession. Maybe we're not entering it yet, but could be entering it into early next year, and that would support growth in the range that you mentioned. And even if we were more severe, we still think we grow nicely. So like John said, there's some really specific items that support that context and that framework, and we don't see really a situation where we start to grow significantly backward.

Super helpful. I appreciate all the context on the call. I guess just drilling down into consumer lending, primarily personal loan and auto. Maybe talk about what you're seeing there on just the origination side. And then also, I think a big opportunity here is new wins as you've alluded to in the past. So maybe you can talk about kind of existing customers versus net new from a pipeline perspective, how those both are shaking out.

Yes, Andrew, it's John. Thank you for your time today. If we examine the overall situation, particularly on the consumer side, lenders are increasingly finding opportunities to engage with consumers and borrowers digitally. They are discovering numerous chances to utilize our various omnichannel and payment solutions. Our conversations around these topics have been positive, and as you mentioned, our pipelines are robust. This gives us added confidence as we look into 2023. Additionally, we experienced a significant customer win this quarter, which is exciting for us because this particular customer plans to use nearly all of our channels and payment modalities. This continues to underscore our efforts to engage both prospects and existing clients to enhance payment transformations into a more digital experience for consumers, who have higher expectations in today's economy.

Our next question comes from the line of Andrew Jeffrey with Truist.

It's Gus stepping in for Andrew. I wanted to explore more about the strong performance in instant funding. Could you discuss if that gives us visibility into the upcoming quarters? Also, any changes in trajectory or insights regarding the financial aspects of that business?

Yes, this is John. Earlier, we discussed a 50% growth year-over-year and quarter-over-quarter. This indicates a positive trend, as indicated in your question. It suggests that when someone funds a loan this way, it likely becomes part of their digital wallet, which means they may want to be repaid in that manner. This is an initial sign of the overall shift toward more digital payments, particularly real-time digital payments utilizing our debit solutions. Additionally, this acts as a demand driver for lending, leading to actual loan funding. We continue to observe strong evidence of this trend. As I mentioned earlier, our funding mechanism is not only being used for loans but is also complemented by various payment and repayment options.

And also maybe to your point on visibility, it is somewhat of an indicator for us on origination activity. The more funding that happens, it's likely happening because there's just a pickup in originations. And so that is a good sign for future repayment opportunities.

Got it. That's really helpful. As the enterprise value falls below $1 billion, what are your thoughts on possibly merging with another company? It seems you've acquired some interesting assets, but the market suggests you might be having difficulty integrating them. Can you elaborate on that a bit more?

Yes. As I mentioned earlier, we believe that the current valuation of our shares does not reflect the true value of our company. We are confident that as we continue to implement our strategy, as demonstrated this quarter and in the future, the market will recognize this true value.

Yes. And then on the integration point, I mean we've done, I think, a really good job of integrating a lot of these assets. We mentioned last quarter that we converted BillingTree back into our back-end platform, which is called RCS. You're seeing, in our gross profit margins this quarter, some of the reduced processing costs and the synergies from that transaction and that conversion. That's just a great example of executing on what we talked about in terms of realizing cost savings as a result of acquiring and integrating BillingTree. And you see that flow through our numbers this quarter as gross margins are higher. So I think we've done a nice job there. We've not done an acquisition really this year since Payix. So we've had, I think, a year where we could focus more internally and we've made a lot of improvements in terms of integrating those businesses, but also in terms of product enhancements and building out our sales force. So we feel good about all the deals we've done and the integration as they've come together.

Our next question comes from the line of Peter Heckmann with D.A. Davidson.

I wanted to ask about the mix. If the U.S. enters a mild-to-moderate recession and it affects payment volume in the lending businesses, potentially leading to an increase in receivables management, what would be the implications of this mix shift on margins? If the lending businesses were to account for about 40% of total revenue, how significantly might that impact margins?

The ARM business is likely to perform well, as it tends to be countercyclical and offers higher take rates and margins. This can help maintain consistent margins even if other areas of lending decline. In terms of B2B, we are focusing more on medium to enterprise-sized customers, which we believe are more resilient in tough economic conditions compared to small and medium businesses. Although the margins for B2B are only slightly lower than the overall average, the growth rate is greater. If the mix shifts more towards B2B, it may slightly impact margins, but not in a significant way, while also supporting growth.

That's helpful. You have a nice, long-term, very low-cost source of capital through the converts. To the extent that an opportunity arises, you currently have the authorization to buy back those bonds in the open market and reduce your total leverage.

No, the authorization we currently have is for our common stock. We have considered what it might look like for the convertible securities, but given the 0% coupon and the maturity date not being until February 2026, we will focus on our existing authorization. This is something we might consider closer to the maturity date, but not at this time.

Our next question comes from the line of James Faucette with Morgan Stanley. Tim Murphy, CFO, stated that the current authorization is for common stock buybacks. There has been some consideration regarding the convertible bonds, but given the 0% coupon and the maturity date in February 2026, the focus will remain on the existing authorization. This potential consideration might arise closer to the maturity date, but not at the moment.

Sure. Good results here, guys. Just in that context, wondering if you can help us a little bit with the underlying market backdrop. Last quarter, you highlighted that you're seeing some difficulties just on the back of credit tightening. But this quarter, you obviously were able to work through that. Can you talk a little bit more about the changes you're seeing in the underlying credit market since last quarter, and any change to how you expect that to flow through to your business? And I guess as part of that, can you give us some update on where you think you stand around sensitivities within the business in terms of credit risk, et cetera?

Yes, the trends are quite similar to last quarter in the lending areas. There are no significant changes. Personal lenders remain focused on managing delinquencies, which has led to slightly tighter underwriting, but not much different from last quarter. The auto market is also consistent from a macro perspective. We continue to see strong performance in B2B, which contributed to our growth this quarter. Some large customers exceeded our expectations and are higher margin clients, resulting in increased take rates and margins, along with BillingTree cost savings. Overall, I don’t see the macro environment as significantly different from what we discussed earlier. We have been able to maintain our execution, and this is reflected in our results.

And then James, the other thing we continue to observe is that we are not a lender. We simply process payments for others with financial technology that facilitates those transactions. As a result, we do not have credit risk exposure from that aspect. Moreover, the payments we handle are primarily automatic recurring payments linked to financial obligations, which shows a degree of stickiness. Additionally, we are still receiving feedback from our consumer clients indicating that the demand for credit remains high. This demand is a positive sign, especially since it decreased significantly during the height of the pandemic.

Our next question comes from the line of Tim Chiodo with Credit Suisse.

I wanted to touch on organic gross profit growth. I believe you said that for the quarter, it was about 15% organic. I was wondering if you could help us a little bit with what the exit rate was. Was it higher or lower, about the same? And what's implied for the Q4 guide in terms of organic gross profit growth? And then within that Q4 implied guide, maybe what's the underlying implied organic gross profit growth absent some of the benefits from the political media spend?

Yes, sure. So we had 15% organic gross profit growth during Q3, like you mentioned. We exited the quarter a little bit higher than that. So we would expect total organic gross profit growth for Q4 to be mid- to high teens. And excluding the political media spend, we would expect that to be somewhere in the low double digits. So we still expect continued strong organic growth next quarter and a solid exit rate going into next year.

Tim, that's really helpful. And then a minor, minor follow-up is you mentioned some nice strength in mortgage. I want to say you set up about 30% or so. And clearly, the mortgage industry itself is not having that type of growth. So it's clearly indicative of strong share gain. Maybe just put a finer point on that and some of the strength that you're seeing and share gain that you're having in this industry.

I want to remind everyone that we are focused on the servicing side of the business. Many of the mortgages originated over the past few years have low interest rates, which puts us in a favorable position compared to the origination side. As a result, this area is performing well, and we have achieved successes in this space. More customers are increasingly using our solutions, and many existing clients are adopting more of what we offer. This sector is highly regulated, and we have the opportunity to assist with compliance while delivering significant value for our clients. The overall digital experience has been very positive for us. Looking ahead to 2023, we see numerous opportunities, as this is a large, underserved market, similar to what we have observed in other sectors historically. We are eager to pursue the opportunities we have identified for execution in 2023.

And Tim, in line with what John mentioned, we have current customers with existing accounts to manage, and these customers are also introducing new products or bringing services in-house. In all these situations, we see an increase in payment volume. Therefore, we want to emphasize that much of our growth is driven by our current customers. While we do acquire new business, the majority of our growth is from existing customers, which makes us less affected by the broader economic climate.

I completely agree. For John and Tim, I think we and, I think, investors fully understand. You're not exposed to the new originations. And we think about the duration of loan repayment, clearly, that's one of the longer ones. And clearly, it's more of a penetration into the existing base of mortgage repayments, I guess, is a good way to summarize it. And it seems like you are penetrating that quite well.

Exactly.

Our next question comes from the line of Bob Napoli with William Blair.

Good to see the strong growth in B2B payments. I would like to know more about the areas where you're investing and where you're seeing strength. Additionally, what are the margins? Is the higher growth in B2B payments affecting your EBITDA margins detrimentally?

So yes, we're investing mostly on the AP side, Bob, where there's a really big opportunity, and we've announced some new partnerships there. We're seeing a lot of success in the health care space in B2B. AP, we're seeing a lot of success in auto dealerships, hospitals. Those are some recent areas of focus within B2B, AP. The margins there aren't quite the level of the overall corporate average. So it would be slightly dilutive, but not materially different. We've really bought businesses that are profitable which is unique within B2B, particularly on the AP side. And so those businesses had profitability and cash flow when we acquired them and have even become more profitable under our ownership. So it's, I'd say, slightly dilutive to adjusted EBITDA margins but not materially and certainly accretive to growth.

We receive many questions about the acquisitions you've made, and it’s difficult to assess their performance. Can you provide any details about how the integrations have progressed? Are there some acquisitions that are performing better than others, and how is the overall integration process? There seems to be a lot of uncertainty surrounding this topic.

Yes, I'll start. As we mentioned earlier, we completed the BillingTree integration this past summer, and it went very well. You can see some of the improvements from our overall processing integration reflected in the third quarter. The personnel aspect has been incorporated almost from the beginning as we align our focus on specific segments within the consumer and B2B sectors. This has been a key initiative for us this year, and it's progressing positively. We will keep refining this process, as it will enhance our innovation and competitiveness across subverticals. Many of our acquisitions have been quite successful. Going back to our first acquisition, we obtained our core processing platform, now known as RCS, and we've acquired several strong B2B assets. TotalPay represents some of the finest technology available in this industry. As we've combined and leveraged that volume, the integration has been smooth, and our teams have collaborated effectively. Overall, we feel we've successfully brought these components together from an acquisition standpoint, which is encouraging as we look ahead to 2023.

And I think in terms of specific deals, I mean, CPS has been great for us that got us bigger into the hospital space. cPayPlus is really our core AP platform now and brought us the TotalPay solution and also our approach to supplier enablement came through cPayPlus. So they all have their own unique attributes and reasons why we did the deals, but we've now brought them together, I think, in a pretty cohesive way, and they're gelling nicely. And we've also made some management changes where we have more dedicated sales and operations folks supporting the integration there as well. So I think it's been very successful.

We are discussing mortgages due to our Ventanex acquisition, which has around 15 years of expertise embedded in our technology. This provides us with a highly successful product and essential integrations. As we move into 2023, Payix will contribute to our organic growth, meaning everything will be part of our growth as a consolidated company. We categorize this growth into consumer payments, business payments, and software and services.

I just want to ask one last question. Could you share the trends you've observed in October and your outlook on growth and profitability for 2023 in this more uncertain environment?

Yes. I mean, John laid out some pretty specific points around why we feel good about growth in 2023. I mean you've got the consumer verticals, specifically, lending that are resilient. We've got the ARM and revenue cycle management businesses, which I think will see a pickup going into next year given some of the increased credit balances for consumers. Payix becomes part of organic, that's growing faster than the corporate average. And then our exposure in B2B is more to medium to enterprise which I think is more resilient than SMBs even in a downturn. So we've seen positive trends into early Q4. Organic growth in Q3 was 15%. It's a bit higher than that in early Q4. We expect it to be higher for Q4 than Q3, and we really see a lot of prospects for growth going into next year for all these reasons.

I mentioned earlier that our sales pipelines from both our consumer and business payments are very healthy and yielding significant wins. Many of these should come online for us in 2023, particularly a major customer win in the quarter, which should be very beneficial for us as it becomes active.

Great. Good to see the solid results. I appreciate the answers to the questions.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.